Some 18 per cent of buy to let landlords have suggested they are not raising rents for tenants despite inflation and soaring mortgage rates.
A survey by lender Landbay shows that 61 per cent of landlords would be obliged to raise rents and 21 per cent remain undecided.
The research shows that over the past year, a majority – 76 per cent – of landlords raised their rent, primarily to cover increasing mortgage costs, with most attributing the rise to increased interest rates.
Additional reasons for rental hikes included covering maintenance, repairs, increases in taxation or energy bills, and the habitual annual raise practiced by some landlords.
Of the respondents, 38 per cent expect rent increases to range between six and 10 per cent; just over a quarter said they would only raise the rent by a maximum of five per cent.
Some landlords admit they are absorbing losses to retain good tenants, while others are postponing rental increases.
Paul Brett, managing director, intermediaries at Landbay, says: “Many landlords, whose mortgage interest rates are increasing, find themselves in the position of having no alternative than to put the rent up in order to cover their outgoings.
“Mortgage costs obviously play a big part in landlords’ expenditure and there is a lot of remortgage activity this year. Our latest product development of like-for-like two-year fixed rate remortgages will help landlords, as the stress test we have to apply for affordability is based on pay rate plus one per cent, instead of the more usual two per cent.
“In fact, we are seeing more landlords opting for two-year terms, which is why we have also launched two-year discounted trackers with no early repayment charges. Borrowers can leave their options open with the opportunity to move onto another product at any time if mortgage rates improve.”